Channels Design and Distribution

Channel Design :

Various channels for Parachute Hair Oil include - wholesalers, retailers, sales agent, advertising agencies.

Parachute Hair Oil employs both pull and push strategy. A push strategy uses trade promotion money, manufacturers sales force or other means to induce intermediaries to carry, promote, and sell the product to  customers. The benefits that Parachute Hair Oil provides are well understood by the customers. Parachute uses majorly a pull strategy product which use promotion, advertising and other forms of communication to a very large extent.

Value:The company should first decide and narrow down on a target market, target group and then take into consideration the demand of the product. Designing of the supply chain backward from that target group should be done leading to a demand chain planning and thus selecting a value network.

Decision Making:

Analyzing Customer Needs and Wants:

Consumers choose the channels they prefer based on convenience,  price as well as their shopping motivates. Parachute hair oil is often used in small quantities by consumers. The waiting and delivery time is almost nothing as the product is available readily to be picked up from the shelf at any store.

Establishing Objectives and Constraints:

Channel objectives vary with product characteristics. Parachute Oil products are transported in bulks to stores and therefore channels that minimize the shipping distance and handling amount is used. This provides appropriate level of service and helps reduces the cost.

Distribution Decision:The distribution channels help businesses meet their marketing sales objectives. Marketing channels not only serve the market and but also help make markets. These channels must be in accordance to the company's strategy with respect to segmentation, targeting and positioning.

Importance of Distribution:

1)  Distribution constitutes a significant competitive advantage and is designed to save on cost, improve and increase efficiency, provide easier transactions, provide larger customer base, and allows businesses to focus on other aspects of the organization.

2) Businesses with  brand strategy, strategic promotion and convenience for customers is provided.

3) Channels  that are poorly chosen can have long term consequences and can ultimately lead to a failure in the market.

Retailing,Wholesaling and Logistics

Wholesaler: Sell at a margin of 8-10%. Sell at local Kirana stores in case the stock is left over.

Kirana Store: The product is purchased at MRP and a margin fixed by the distributor of the company is earned.

Super Markets: Buyers decide on pricing Strategies depending on the locality and nearby retailers. Products can be sold at a discount of Re1 or 50 paisa for Parachute Hair Oil.

Hyper Markets: They sell in packs of 3 and reduce the total MRP by Rs 5-8. Small SKU's are at times available for free with the product.

Distribution network for Parachute in India:

Sales territories:

Urban-135

Rural-35

Towns covered:

Urban- more than 32000

Rural- more than 11000

Distributors - 850

Super distributors - 120

Retail outlets: 

Urban - 1.65 million reach

Rural- 0.85 million reach